Kellogg Company

--Long-term Issuer Default Rating (IDR) at 'A-';

--Senior unsecured debt at 'A-';

--Bank credit facility at 'A-';

--Short-term IDR at 'F2';

--Commercial Paper (CP) at 'F2'.

Kellogg Europe Company Limited

--Long-term IDR at 'A-';

--Short-term IDR at 'F2';

--CP at 'F2'.

Kellogg Holding Company Limited

--Long-term IDR at 'A-';

--Short-term IDR at 'F2';

--CP at 'F2'.

The Rating Outlook is Stable. Total debt at the quarter ended July 4, 2009 was $5.3 billion, including $508 million of notes payable (primarily consisting of commercial paper).

Kellogg's ratings incorporate its leading market share positions, strong brand equity and solid top-line and operating earnings growth on a currency-neutral basis. The ratings are also supported by the company's clear and balanced financial strategy, as well as its ample liquidity and high margins for the packaged food industry. Approximately half of Kellogg's sales are in the cereal category, and this product concentration is also reflected in the ratings. Free cash flow (cash flow from operations less capital expenditures and dividends) has averaged approximately $425 million over the past four years, even with $451 million of pension and other post retirement contributions in 2008. Free cash flow is expected to be at least $500 million in 2009. On July 4, 2009, Kellogg's liquidity included $424 million of cash and cash equivalents and its undrawn committed unsecured five-year credit facility expiring in November 2011. This credit facility allows the company to borrow up to $2 billion and obtain $75 million letters of credit. It contains covenants that restrict subsidiary indebtedness, liens and sale-leasebacks, and requires an interest coverage ratio of not less than 4.0:1.0. Kellogg's next material long-term debt maturity is $1.4 billion 6.6% notes due in April 2011. Fitch expects that the company is likely to refinance this debt.

Net sales in the first half ended July 4, 2009 fell 3.1% to $6.4 billion, as compared to very strong 10.4% sales growth in the first half of 2008. First-half 2009 sales were generated from a 1.1% decline in volume, 4.5% improvement from price/mix, 0.5% from acquisitions, and 7% reduction from foreign exchange impact. Since nearly 40% of Kellogg's sales are from outside the U.S., the U.S. dollar's strength versus foreign currencies has reduced sales growth. Internal net sales, which exclude the impact of currency and acquisitions/divestitures, rose 3.4%.